In Ukraine, shopping in discount stores is still not very common. While in America it is everyday. It is in this area that the Walmart retail chain has risen, with an annual budget that now exceeds the budget of Norway, and the number of employees is slightly less than the soldiers in China. How did the company manage to get the positions it is currently in?
From Franchising to Daily Discount Store
Walmart himself willingly tells what the secret of success is. Network founder Sam Walton wrote a biography of the company. He called one of the finest pages in American business history. In his book, he says that from childhood he treated money “with respect” and hated competitors. He never sought to buy a yacht or an island, and all the shares of the company will be inside the Walton family as long as he can control it. However, he is ready to come from the other world in order to arrange a cheerful life for descendants if they begin to bargain in shares.
The idea to open shops in the countryside belonged to his wife Helen. Since both spouses were social activists by nature and easily communicated with local residents. And therefore always knew their needs. Sam was incredibly hardworking and was not afraid of any difficulties; back in 1957, when he did not yet have a personal brand, and he worked with franchises, he spent almost all his free time on the road, and bought himself a private jet – so that he could be in time everywhere.
In 1962 he opened the first Walmart, already knowing that he was in the discount business. And from the first days I began to look for the most talented salespeople who began to compete with each other, who would be able to promote more goods so that they would be sold out instantly and in large quantities. Excellent store directors are the pride of the company to this day.
Walmart Top Business Lessons
Later, the company’s CEO Brian Roberts and Natalie Berg published a book. They named the key principles that help to adhere to the policy of daily low prices:
- cost savings, e.g. packaging;
- scale of sales. The scale of Walmart’s turnover is such that manufacturers simply cannot afford not to ship their wares to this retailer.
But beyond that, there are a number of other benefits that Walmart received first:
- assortment of goods in stores. A typical Walmart is a hundred thousand items of goods placed on 5000 square meters;
- sales in rural areas where there are simply no other chain stores. Walmart is often the only one for hundreds of kilometers. And farmers are ready to drive an extra hour to buy at a good discount;
- creating subsidiary brands such as Sam’s Choice. They are hardly advertised and sold only at Walmart, is much cheaper than counterparts;
- work directly with manufacturers. Walmart spends more effort on logistics, building distribution centers. And building collaborative teams and participating in product creation, design and marketing;
- tough negotiation style. They make every effort to get the supplier to lower the price;
- technological trends. The founder of the network, Sam Walton, assures that this is precisely what is now giving enormous benefits. Thus, the availability of goods on the shelves and the timely submission of orders to the distribution center is monitored by software. And with the help of neural networks, sellers predict which goods will be in demand, on what dates, in what cities.
Walmart now sees its future in expanding international trade and going online. The company entered the Internet quite late – in 2015. And the volume of this segment is still small. High-tech work continues: Walmart has launched a voice assistant.